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Crossbreeding: Considerations and Alternatives in an Evolving Market Nevil C

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Crossbreeding: Considerations and Alternatives in an Evolving Market Nevil C ANGUS MEANS BUSINESS. Crossbreeding: Considerations and Alternatives in an Evolving Market Nevil C. Speer, PhD, MBA Western Kentucky University American Angus Association • Page 1 The marginal benefit “ of heterosis isn’t sufficient if it’s associated with the added marginal cost of purchasing genetics that might represent the risk of requiring more time and labor.” hese are good times and challenging No longer are we an industry that times for America’s cattle business. simply crossbreeds cattle to maximize T Record-high prices for cattle. pounds and receive a price based on Unprecedented demand for high-quality market averages. beef. Expanding opportunities to add value Instead, we have set higher standards. to our product both here and abroad. We have become a value-based industry, At the same time, we are faced with concerned with the composition — not uncertainty. There’s drought across much the maximization — of those pounds. of the country. Input costs for feed and Today, the Angus breed is uniquely fuel are higher than ever before. Labor positioned to address many of our costs continue to rise. The high price of industry’s challenges — and to help land makes it next to impossible for many individual producers capitalize on the to expand, let alone enable newcomers to opportunities of a value-added marketplace. enter the business. Cattlemen can leverage the Angus In the following pages, these challenges database — the most extensive and and opportunities are explored by animal comprehensive of its kind — to select for scientist Dr. Nevil Speer of Western calving ease (to reduce labor costs, death Kentucky University. loss and reproductive failure) and also for His white paper, first published about growth, carcass quality and a host of other a year ago, discusses the historic changes economically important traits. now sweeping our industry — and The Certified Angus Beef® brand offers acknowledges how a quality-focused, value- the most unique — and easily accessible — added approach underpins the future of premium market available to ranchers, and our business. it is seeing a continuous rise in demand. More than three decades ago, the As Speer puts it in these pages: American Angus Association® took a The cattle business is changing. The pioneering step toward greater consumer cattle business is risky. But there are orientation. The creation of Certified Angus unprecedented opportunities to reduce Beef LLC, which marketed more than 800 that risk; the quality revolution now million pounds of quality Angus beef last sweeping our industry begins with the year, has helped to change the makeup of decision to breed your cows to reliable, the nation’s cow herd — and the way cattle consistent, registered Angus bulls. producers view their efforts on farms and ranches. — Bryce Schumann, American Angus Association CEO What Cost for a LunchFree ? Overview of Genetic Management and Crossbreeding in the Beef Industry rossbreeding most commonly invokes crossbred calves nursing crossbred cows typically the free-lunch metaphor within the beef realize an improvement of 10% to 20% in weaning Cindustry. The standard mantra is something weight. Moreover, realization of that crossbreeding to the effect of, “Hybrid vigor is the last free lunch, advantage doesn’t require much in terms of so get all you can with crossbreeding.” additional inputs — thus summoning that “free That’s a logical perspective. The advantage lunch” caricature. associated with the benefits of crossbreeding is Simultaneously, though, it’s increasingly apparent a well-documented phenomenon. Research has that beef producers aren’t fully exploiting those clearly and repeatedly demonstrated benefits benefits. Despite well-documented advantages associated with implementation of crossbred derived from crossbreeding, cow-calf producers mating systems in various production systems. have seemingly de-emphasized the pursuit of Simply put, crossbred animals outperform their heterosis within their respective operations. That straightbred contemporaries. Moreover, those is, the nation’s cowherd has reversed course from principles are underscored by similar outcomes in the broad and fairly well-entrenched undertaking to other species of livestock. introduce heterosis, especially those efforts linked Weaning weight serves as the single trait to the establishment of Continental European of most importance in a majority of cow-calf beef breeds within the United States (more on operations: weaning weight equals pay weight and that topic in the next section). If crossbreeding thereby represents the overwhelming source of represents the free-lunch, all-benefit, no-cost revenue for most producers. Favorably, weaning scenario outlined above, why are producers weight also represents the trait in which the seemingly retreating from implementation? “Hybrid vigor is the last free lunch, so get all you can with crossbreeding.” greatest benefits of crossbreeding can be realized. That question merits a deeper look. Ostensibly, The payoff culminates from several aspects there must be some reasonable explanation. of production. Research literature indicates Meaningful factors or additional considerations substantial benefit from the combined effects of often overlooked by conventional wisdom and both individual and maternal heterosis at weaning proven science must be at work. The purpose time (growth and survivability coupled with milk of this white paper is to explore some possible production and fertility, respectively). The average explanations for those broader genetic strategies boost varies across respective trials depending within the U.S. cowherd, not from the perspective upon environmental conditions and management of a geneticist, but from that of basic animal science schemes. In general, though, producers weaning and practical, economical herd management. Page 2 • American Angus Association Lunch ? SDA’s 2008 National Animal UHealth Monitoring System (NAHMS) survey results indicate that the most common descriptor (45%) used by commercial producers to classify their cowherds is “crossbred,” albeit comprised of no more than two breeds. Clearly, operational priorities are highly varied However, respondents to surveys performed by across the segment, and that’s likely true for a BEEF magazine (2010) reveal that nearly half of all number of management considerations. producers classify the genetic composition of their For example, 45% of producers indicate breed cowherds as being high-percentage or straight is an unimportant consideration when purchasing British. That’s further reinforced by several informal a bull or semen to breed replacement heifers surveys that indicate the sector transitioning from (NAHMS, 2008). As such, a large portion of the a multiple-breed status to one predominately industry exemplifies either: composed of a single breed. The Angus breed now accounts for approximately 70% or more 1) Haphazard implementation of crossbreeding of the genetics in the nation’s commercial beef within individual herds or, production system, leaving the remainder of the 2) General disregard for the importance of herd mix to be divvied up among other breeds. systematic or strategic planning when it comes to Many within the beef industry express genetic management. frustration at that fact, some even referring to it as “disturbing.” Academicians and industry observers voice a common sentiment: Either way, the outcome is the same: despite “It’s a mistake for producers to move back widely accepted perceptions about genetic to straightbreeding programs and give up the management and the importance of crossbreeding, additional pounds that can be produced from a a large number of producers possess no real herd through good, well-designed crossbreeding breeding plan at all – they remain indifferent or programs.” More importantly, it raises questions unaware of benefits associated with hybrid vigor about why such a development has occurred (at least as implemented in a systematic manner). over time. By default, that still leaves half of operators It’s important to note that many assumptions who could be categorized as relatively discerning about beef cattle crossbreeding are from a one- and strategic about planned mating systems (either size-fits-all model. However, the beef industry, crossbred or straightbred). That demarcation, especially the cow-calf sector, remains a highly however, underscores the wide gamut of fragmented business comprising 750,000 philosophies regarding genetic management. And independent entities. Any attempt to make therein we find the inherent difficulty associated industry-wide inferences about any topic proves with making broad assumptions about traditional somewhat tenuous and may therefore lead to business models and related decision-making erroneous assumptions. across the cow-calf sector. American Angus Association • Page 3 Figure1: Per Capita Meat Expenditures: Beef vs. Pork/Poultry Combined Point 1: Business Transition (Adapted from USDA:ERS) he beef industry has traditionally operated within a Thighly segmented, fragmented commodity framework. As referenced earlier, the primary revenue driver for most cow-calf operations rests wholly 1980-1998 New Spending Beef = $6.07 • Competition = $112.43 on weaning weight. Historically, there’s been little differentiation within the marketplace in terms of quality every new spending dollar while the competition discounts or premiums. Therefore, profitability teamed up for 95 cents (see Figure 1). Beef was within the cow-calf
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